To ease European Commission (EC) concerns over the proposed union of their Danish wireless operations, TeliaSonera and Telenor confirmed Monday that they have offered to sell a 40% stake in TT-Netvaerket (TT-N), their joint network infrastructure company, in an effort to secure merger approval that would reduce the number of wireless competitors in Denmark from four to three. Unveiled last December, the proposed 50-50 joint venture combining the Danish operations of TeliaSonera and Telenor—the second- and third-largest wireless carriers in Denmark—would rival national market leader TDC with 3.5 million subscribers and a 40% share of the Danish mobile market. Voicing concern that the transaction could lead to “higher prices, loss of innovative offers and lower quality,” EC Competition Commissioner Margrethe Vestager confirmed in April that the EC had initiated an in-depth investigation into the deal that is still ongoing.
Since 2012, Telenor and TeliaSonera have offered mobile services independently to Danish customers through their commonly-owned TT-N network infrastructure. Under the plan submitted to the EC, TeliaSonera and Telenor would offer a new market entrant the opportunity to purchase an initial 15% stake in TT-N. In a year, the buyer would be able to exercise an option to raise that stake in additional 5% increments until it reaches 40%. While the buyer would not control any spectrum, TeliaSonera and Telenor would provide the buyer with access to TT-N network technologies and would also permit the buyer to sell network capacity to wholesale customers. Telenor also said it would sell its Danish pre-paid online business, which serves between 140,000 and 150,000 subscribers, to the new market entrant. Although the EC had initially been expected to hand down its ruling in August, a final decision is now anticipated by October 7. EC officials, meanwhile, offered no comment.